confidentially speaking
The Africa Confidential Blog
Big social social spending and big borrowing in Buhari's maiden budget
Patrick Smith
In a final splurge of news before the new year, Nigeria's President
Muhammadu Buhari presents
a mega-budget and Burkina Faso's
new government issues
an arrest warrant for ousted President Blaise
Compaoré. And there is electoral
competition in Uganda and Djibouti, both of which face polls
early next
year. But in Rwanda, which has
just seen a referendum offering
President Paul Kagame the
change to stay in power for another two decades,
there is an eerie absence of political competition. Finally, a
heartening story from northern Kenya
where Muslim passengers protected
their Christian compatriots from a terrorist attack.
NIGERIA: Big social
spending and big borrowing in Buhari's maiden budget
Allocations for health and education topped planned spending on defence
in the 6.08 trillion naira (US$30.8 billion) budget – the country's
biggest
ever – announced by President Muhammadu Buhari on 22 December. Buhari's
budget for 2016 is heavily expansionist despite the country's tough
financial and security conditions.
Central bank officials said an economic stimulus was necessary
to stop
the economy from slipping into recession. Buhari's budget statement
forecast 4.4% economic growth in 2016 on the basis of the planned
spending on jobs and infrastructure. The economy still takes its lead
from the state sector although Buhari announced plans such as tax
breaks to help small to medium scale companies.
Education gets N396 bn. which provides for the hiring of
500,000 new
teachers to address the crises in the schools and colleges; health gets
N296 bn.; and defence gets N294 bn. or well under a third of the
defence
budget in President Goodluck Jonathan's
last year in power. Those
defence allocations are now the subject of a sweeping anti-corruption
investigation which has already resulted in charges against Colonel
Sambo Dasuki, the former
National Security Advisor.
The uptick in social spending and infrastructure (at least 30%
of the
budget will be capital spending) means a doubling of the budget deficit
to N2.2 tn. or about 2.16% of gross domestic product. To fund the
deficit
the government will borrow some $5 bn. for international markets and
slightly more from the local market. We hear there are continuing
discussions with Qatar about a
multi-year loan programme and some
project finance.
Just as the final touches were put to the budgetary
calculations this
week, the government's economic team decided to base revenue estimates
on an oil price of $38 a barrel. By the time Buhari read the speech,
the spot market oil price had fallen to $34 a barrel. Yet Buhari
insisted that his government was determined to end Nigeria's dependence
on crude oil exports which still account for about 95% of the country's
foreign exchange revenues.
Buhari also hinted that the government would be more flexible
on
exchange rate policy in 2016 which prompted some bankers to suggest
that there could be a managed devaluation of the naira next year. Yet
insiders insist that Buhari wants to block what he considers to be the
wasteful use of foreign exchange to import items that Nigeria could be
manufacturing.
There are also signs that the government might take advantage
of low
international oil prices to phase out national fuel subsidies. Given
this is one of the most sensitive issues in Nigerian politics, the
government is likely to tread very carefully before announcing any
policy shift. In another change of style from his days as military
leader in the 1980s, President Buhari apologised to Nigerians for the
shortages of gasoline, telling the National Assembly that the latest
reforms to the oil sector should put an end to all that.
BURKINA FASO: Arrest warrant
issued for ousted President Compaoré
Less than a month after his election victory, President Roch Marc
Christian Kaboré has shown his differences with the ancien régime and
laid down a challenge to neighbouring Côte
d'Ivoire. On 21 December,
Kaboré's government issued an international arrest warrant for Blaise
Compaoré, the ousted Burkinabe President, who is now living in Côte
d'Ivoire.
The arrest warrant was issued in connection with the murder in
1987 of
Thomas Sankara,
Compaoré's
popular and radical predecessor. Sankara's
body was found to have multiple bullet wounds when it was exhumed last
May as a part of a new investigation into the circumstances of his
death. Already General Gilbert
Diendere, Compaoré's security chief, has
been charged with complicity in Sankara's murder.
Given Compaoré's closeness to senior figures in President Alassane
Ouattara's government in Côte d'Ivoire, it is uncertain whether
the
former Burkinabe leader will be handed over to Ouagadougou. Failure of
Côte d'Ivoire to comply could lead to a rapid worsening of relations
with the new government in Burkina.
DJIBOUTI: Clashes as Guelleh
prepares to stand again
Accounts differ about the latest confrontations in Djibouti ahead of
the Presidential elections due in April 2016. Having insisted he had no
interest in standing again, President Ismail
Omar Guelleh, now seems
set to run in the election at a time of heightening security tensions
in the region.
Government sources insist that just nine people were wounded
when
'dozens of armed' oppositionists attacked a state security facility in
the Buldhoqo area. But opposition groups say at least 19 people were
killed as government forces tried to suppress a demonstration.
By hosting French and
United States armed
forces and now a Chinese
military base, Guelleh may reckon that these security deals could
shield his government from serious foreign criticism over his political
tactics. That calculation will be tested over the next few months as
electoral tensions grow.
RWANDA/UGANDA: From third
term to endless terms
Those two old comrades, Uganda's Yoweri
Museveni and Rwanda's Paul
Kagame are showing a clean pair of heels to other would-be long stay
leaders in the region. Museveni, in power for 30 years, has serially
orchestrated constitutional changes to allow him to extend his tenure
but shows no signs of mellowing as one of his former lieutenants, Amama
Mbabazi, challenges him in Presidential elections due in
February 2016.
On 21 December, police raided Mbabazi's political headquarters
and
arrested 20 people, raising fears of worsening violence ahead of the
poll. Yet Museveni is tipped to win, given a combination of the
government's incumbency, some political crookery as well as the fact
that the other two main candidates, Mbabazi and Kizza Besigye, are
likely to split the opposition vote.
And also on 21 December, President Kagame thanked Rwandans for
voting
in a national referendum over the weekend to allow him to run for
another seven year term, and then two more terms of five years each. On
paper this means Kagame could extend his tenure until 2034.
Although 98% of those casting ballots backed Kagame in the
referendum,
opposition activists complained they were given very short notice of
the vote and were not allowed to campaign. The United States, which has
generally supported Kagame, said he could best serve his nation by
stepping down in 2017 and upholding the constitution's term limits.
KENYA: True bravery on the
road
The courage of some Muslims in Mandera, north west Kenya, saved the
lives of many of their Christian compatriots on a bus when ten heavily
armed Al Shabaab militants
sprayed it with bullets and killed two
passengers.
The militants ordered the Christians and the Muslims on the
bus to
separate. A year ago, Al Shabaab
attacked in the same area and killed
all the non-Muslims on a bus bound for Nairobi. But this time the
Muslims refused to cooperate with the Al
Shabaab fighters, some even
gave Muslim attire to the Christian passengers.
Apparently surprised by this show of community solidarity, the
Al
Shabaab fighters left the scene but threatened to return.
Accounts of
the Muslim passengers' bravery have been reported on many national and
international news outlets and contradict claims of a religious
polarisation in Kenya, following a wave of terrorist attacks over the
past five years.
And for 2016…
The team at Africa Confidential
want to take this opportunity to send
you all our best wishes for the new year. We will be back in the first
week of January with a special edition of Africa Confidential full of
detailed political and economic forecasts for developments in 2016.
